UK to give £12bn to new Infrastructure Bank

1 March, 2021 12:00 AM printer

LONDON: Britain is to launch a new Infrastructure Bank with £12 billion ($17 bn, 14 bn euros) in capital and £10 billion in government guarantees, the Treasury said Saturday, aimed at kickstarting the economy.

The Chancellor of the Exchequer Rishi Sunak is expected to announce the initial funding at Wednesday’s Budget and the bank will launch in spring, the Treasury said.

“Britain’s businesses and the Great British public deserve world-class infrastructure and that is exactly what this new Bank will help us deliver for them,” Sunak was quoted as saying, reports AFP.

The bank is set to finance private sector projects in the green economy, focusing on areas such as carbon capture and renewable energy, reports AFP.

It will also provide loans to local authorities at low interest rates to support “complex infrastructure projects.”

The Treasury said the Bank would unlock billions more in private finance to support a £40 billion infrastructure investment to “fire up the economy” and help reach commitments on net zero emissions and reducing regional deprivation.

The announcement comes as Britain’s economy has been hard-hit by pandemic lockdowns.

Analysts expect unemployment to surge when the UK government’s furlough scheme paying the bulk of wages for millions in the private sector ends—as currently planned—at the end of April.

Sunak last week hinted he would announce further employment support in the coming months.

The Chancellor first announced the planned Infrastructure Bank in November last year, saying its headquarters would be in northern England rather than in the financial hub of London.